Threatened U.S. Crisis, Oil Price Down

NEW YORK: Oil prices fall after U.S. President Barack Obama said the failure of the U.S. debt ceiling increase resulted in the country fell into recession and threatened a worse crisis than the crisis of 2008 to 2009.

The contract price slipped 1.3% oil was also influenced by concerns a worsening debt crisis Greece and Europe threaten economic growth.

"Oil prices could go down in the second half of this year amid signs of slowing demand," said Head of Commodities Research at Merrill Lynch Bank of America Boil Francisco.

Furthermore, energy and minerals economist at National Australia Bank Ltd. in Melbourne Ben Westmore predict crude oil will penetrate the U.S. $ 113 per barrel in the quarter III/2011. "At this point, anything that looks negative impact on growth in the U.S. will be a factor in oil prices," said Ben.

Crude oil for June delivery slipped as much as U.S. $ 1.30 to U.S. $ 98.35 per barrel in electronic trading on the New York Mercantile Exchange and was at U.S. $ 98.79 at time 13:06 Sydney, Australia.

The contract rose 2.5% last week, its biggest weekly gain since the period ended April 8. The price was 41% higher than last year.

Price of Brent oil contract for December lost 44 cents, or 0.4% to U.S. $ 113.39 a barrel on the futures exchange based in London, the ICE Futures Europe. The contract rose 4.3% last week.

The U.S. government will begin to stimulate domestic crude oil production to ease rising gasoline prices, including through measures to encourage oil drilling in Alaska, USA.

In addition, giving oil companies more time to comply with safety regulations. This is expressed by Obama in his speech last weekend.

By        : Merrill Lynch Francisco Boil, Head of Commodities Research Bank of America.